Hello and welcome to the DCT Industrial fourth quarter and year end 2008 earnings conference call. (Operator Instructions) Please note this conference is being recorded. Now I would like to turn the conference over to Ms. Sara Knapp.

Sara Knapp

Thank you, [Ryan]. Hello everyone and thank you for joining DCT Industrial Trust fourth quarter and year end 2008 conference call. Before I turn the call over to Phil Hawkins, our CEO, I would like to mention that management's remarks on today's call may include statements that are not historical facts and are considered forward-looking, within the meaning of applicable securities laws, including statements regarding projections, plans, or future expectations.

These forward-looking statements reflect current views and expectations, which are based on currently available information and management's assumption. We assume no obligation to update these forward-looking statements, and we can give no assurance that the expectations will be attained.

Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks, including those set forth in our earnings release and in our Form 10-K filed with the SEC, as updated by our quarterly reports on Form 10-Q.

Additionally, on this conference call we may refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures are available in our supplemental package, which can be found in the investor relations section of our website at dctindustrial.com.

And now I'll turn the call over to Phil.

Phil Hawkins

Thanks, Sara and welcome everyone. We appreciate you spending the time with us today. Joining me in presenting on the call will be Jim Cochran and Stuart Brown, and also in the room and available to answer any questions directed their way, our Daryl Mechem and Matt Murphy.

The economy continues to be at the forefront of our everyday lives, as well as the media's coverage, so I won't spend a lot of time recapping the overall business environment. Suffice it to say that the economy and the real estate markets continue to soften, and will likely continue to do so over the coming months – that isn't news, I don't believe.

What is important is how DCT is continuing to anticipate and respond to the challenges presented by our struggling economy, credit markets, and real estate markets. Our approach is both focused and straight-forward, and can be described in three words, leasing and balance sheet; let me expand on that.

First, with respect to leasing, I am pleased to report that we had another decent quarter with 2.5 million square feet of leases signed, tenant retention of 79%, rent growth of 6.8% on a cash basis, 10.4% on a GAAP basis, and occupancy in our operating portfolio of 93.2% at year end, up from 91.9% at the end of the third quarter.

We are pleased with the leasing volume, which was below the record level in the third quarter, but consistent with the first two quarters of 2008, and the fourth quarter of 2007. Leasing activity continues at a comparable pace so far this year, with 878,000 square feet of leases signed in January.

Not surprisingly, and as assumed in our forecast, leasing activity in the markets continues to slow and we'd expect that conditions will remain very competitive and in fact, increasingly so for the foreseeable future. We adapted our leasing strategy to this type of environment quite some time ago.

This is basic blocking and tackling, and includes an intense focus on early renewals, insuring that we are very competitive on rents, a strong bias toward the occupancy over rent, and a close eye on kind of credit, especially when material tenant improvements are involved. Simple, but important, and we are keeping our leasing team very focused on the goal of making every deal possible.

We are starting to see signs of an increase in tenant initiated requests for rent relief, in response to their own financial stress or at least alleged financial stress. Again, this isn't surprising given the economy as well as experiences in prior downturns.

Our approach to these requests is similar to any other tenant-related negotiation, and that is to evaluate the situation, assess their true financial condition, and then make a decision about what course of action, if any, is in the company's best interest. In short, a pragmatic approach to the situation.

Now with respect to our other primary area of attention, the balance sheet; as I think most of you are aware, we were fortunate to enter into this downturn with a strong balance sheet already in place, and we took a number of important steps during the year to insure that remains the case.

These have included an active disposition program, which thankfully began before the investment markets turned, putting in place the new term loan last summer, putting the brakes on new investment and development starts, and reducing our dividend to a level near our minimum legal payout and which is sufficiently covered by AFFO.

As a result, our fixed charge cover ratio remains strong at 2.8 times, and our available cash and line capacity of $304 million is more than sufficient to cover all pending cash obligations, including remaining funding of our development pipeline and scheduled debt maturities through 2010.

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